Simple rules about how to get money for your startup

1. How to get money for your startup

2. 02. Team
3D Founders: Developer, Designer and Distributor
Someone who understands how to build technologies and
systems to solve problems
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Someone who understands the human factors behind these
problems, why they exist, what it takes to fix them and how to
shape the experience
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Someone who understands how to reach, talk and sell to the
people whose problems are being solved - and keep finding more
of them.
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3. 03. Idea
Find a startup idea that:
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is already making money for someone else in a growing
industry interests you aligns with your skill sets.
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4. 04. Remedy
Once you find such an idea, simply carve out a
niche within the industry by:
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Addressing pains of an under-served segment within that
industry
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Or, making it much easier to use than existing solutions
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Or, disrupting the market by making your product accessible
to masses at a much affordable price.
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5. 05. Getting investments. Theory
Initial stage of investment is called «seed round» or
«angel round»
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The most typical investors - individuals with experience in
high-tech and some capital
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A less common type of investor - a venture capital
companies, who wants to invest in small deals
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Also, it may be your relatives or friends.
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6. 06. Getting investments. Theory
Try to stay away from:
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investors without investment experience
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and competence (dumb money)
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unknown persons for you
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your relatives or friends.
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7. 07. Getting investments. Theory
The typical amount of initial funding - is $100,000
- 500,000.
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No point to take less than $100,000 because it will
be not enough to reach the next round of funding
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Very hard to take more than $500,000, because
your company had not developed sufficiently.
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8. 08. Getting investments. Theory
The typical equity, you need to share at this stage
is - 10% to 30%
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Ideal case - less than 20%
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Never give more than 30% for the initial funding.
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9. 09. Getting investments. Theory
There are lots of forms of structured deals, which can
be used for investment.
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The best way - convertible debt - simply a loan
(a debt obligation) that can be turned into equity
(stock ownership), generally upon the occurrence of
future financing.
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10. 10. Getting investments. Investor deck
Create project presentation - investor deck
You need to create no more than 10 slides
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10 - is the optimal number of slides in a PowerPoint
presentation because a normal human being cannot
comprehend more than 10 concepts in a meeting - and
venture capitalists are very normal.
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If you must use more than 10 slides to explain your business,
you probably don’t have a business.
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11. 11. Getting investments. Investor deck
The investor deck should contain mostly text, some
graphics and images.
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Forget about Business Plan at this stage - it is usually a
waste of time, because everything will change very fast.
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12. 12. Getting investments. Investor deck
10 topics that a venture capitalist
cares about are:
1. Problem
2. Your solution
3. Business model
4. Underlying magic/technology
5. Marketing and sales
6. Competition
7. Team
8. Projections and milestones
9. Status and timeline
10. Summary and call to action
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13. 13. Getting investments. Elevator pitch
Create elevator pitch.
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It is a short summary that is used for quick and simple defining of your product or service and its value proportion.
_____________________________________________________________
The name "elevator pitch" reflects the idea that it should be possible to deliver the summary in the time span of an
elevator ride, or approximately thirty seconds to two minutes.
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Go to my website to collect free elevator pitch example: www.kenigshtein.com
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14. 14. Getting investments. Investors list
Compile a list of target investors. Create this list in
Excel, using your & your friends network.
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Forget about Sequoia Capital or Mangrove Capital at
this stage.
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You should be able to find 10-20 investors in your
area.
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If you are not able to find at least 10 investors around
you - change the area.
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15. 15. Getting investments. Investors list
You need to make priority of investors and determine
who is TOP5 in your list.
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You also need to allocate a specific time-frame for
consideration of each investor.
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If the investor is "flog a dead horse" more than 1
month - forget him, most certainly he is just an idiot.
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16. 16. Getting investments. Pitching
Twenty minutes.
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You should give your ten slides in twenty minutes.
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Sure, you have an hour time slot, but you’re using
a Windows laptop, so it will take forty minutes to
make it work with the projector.
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Even if setup goes perfectly, people will arrive late
and have to leave early.
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In a perfect world, you give your pitch in twenty
minutes, and you have forty minutes left for
discussion.
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17. 17. Getting investments. Pitching
Guy Kawasaki is the co-founder of Alltop.com, an “online
magazine rack” of popular topics on the web, a founding
partner at Garage Technology Ventures and the Chief
Evangelist of Apple previously, said:
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18. 18. Getting investments. Pitching
"As a venture capitalist, I have to listen to hundreds of entrepreneurs pitching their companies. Most of these
pitches are crap: sixty slides about a “patent pending,” “first mover advantage”, “all we have to do is get 1% of the
people in China to buy our product” startup. These pitches are so lousy that I’m losing my hearing, there’s a
constant ringing in my ear, and every once in while the world starts spinning."
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19. 19. Getting investments. Money
This is the most important stage in your project’s life.
Start talking with the investors.
E-mails, Skype calls, meetings - use everything you can.
Most professional investors will agree to invest even before the end of your meeting or Skype call.
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20. 20. Getting investments. Money
Once you get the written consent of one investor, refer
to the next investors, appealing to the fact that the
previous one has already agreed.
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Many investors could be interested, but it is hard to
convert just interest into the formal signing of
documents, without extra motivation.
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21. 20. Getting investments. Money
Offer more favorable conditions for those who makes
decision faster and motivates investors when
someone else agrees.
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Whenever you have any new arrangements, let them
all know about it, thereby giving them additional
reason to follow.
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22. 22. Getting investments. Money
Nothing pushes investors to make an investment decision, as the
actions of other investors.
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Every time when someone agrees - immediately ask them to sign
a papers and send the money.
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It is very important, as each day of delay reduces the chance of
signing.
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23. 23. Getting investments. Money
Remember! Always be closing.
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24. 24. Findings
Choose a niche for your startup;
Find the first investor with a good reputation, skills and competence;
Communicate with many investors, 3-4 times more than you need;
Push the investors;
Bring to the end every deal.
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25. 25. Contacts
Good luck!
Ilia Kenigshtein
Business / Sales Executive
Serial Entrepreneur
ilia@kenigshtein.com
http://linkedin.com/in/kenigshtein
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